Martin Brudermüller brought two things with him to his last general meeting as CEO of BASF. They are intended to illustrate to shareholders what the chemical company is doing and how it has changed. “Chemistry is everywhere,” is one of Brudermüller’s favorite sentences. Many people, i.e. those who don’t want to work for BASF and especially not those who might want to become CEO one day, associate chemistry with unpleasant memories of their school days. Brudermüller says he already had a chemistry set at home before chemistry lessons started at school.
Brudermüller’s speech on Thursday in Mannheim is a review of the 2023 financial year and a bit of a review of his professional life at BASF; he’s never been anywhere else. Hence the two things, technological change in two things. Past and present. Brudermüller pulls a white cassette out of his right suit pocket. Baby boomers like him used to record the hit parade with Dieter Thomas Heck – or something like that. “This was a bestseller when I started,” says Brudermüller. That was 1988, to be precise, the cassette was already in its prime.
Brudermüller pulls a transparent film out of the inside pocket of his jacket. “It is a technological masterpiece for aviation,” says Brudermüller. Under the microscope you could see that the surface is imitated by shark skin; it is intended to reduce air resistance and thus the energy consumption of aircraft and thus CO₂ emissions. That’s what BASF is all about: the green transformation, both our own and our customers’.
Shareholders, shareholder advocates and fund managers praise Brudermüller. “Master of the crisis” could stand above the Brudermüller era, says Marc Tüngler, managing director of DSW, the German Association for the Protection of Securities Ownership. That’s the point. During Brudermüller’s term in office – from 2018 to today – there were many crises: the pandemic, the war in Ukraine, the growing geopolitical tensions, the energy price shock, high interest rates, inflation. BASF also started 2024 weaker than in the previous year: In the first quarter, sales fell by 12.2 percent compared to the same period last year to just under 17.6 billion euros, and earnings after taxes fell in almost the same percentage to just over 1.4 billion Euro. The company announced this.
Despite all the adversities, Brudermüller set the right course. But today you can’t see what successes will come, says Tüngler. Rarely has the world been so disordered and so unpredictable, says Brudermüller in his speech. Arne Rautenberg, fund manager at Union Investment, says: “You are now handing over a construction site to your successor.” The Ludwigshafen site has become a problem for BASF since there is no longer any cheap gas or electricity there. BASF says it made money all over the world in 2023. Only at the Ludwigshafen location were major losses incurred.
At the end there is another verbal abuse, typical of Brudermüller
BASF’s involvement in China, the new Verbund site in Zhanjiang, is the subject of many speakers. Rautenberg asks what makes Brudermüller and his successor Markus Kamieth so certain that their investments in China will pay off for shareholders. “The China bet is risky,” says Linus Vogel from the fund company Deka Investment. “An overly one-sided fixation on China could come as a similar surprise to BASF as an overly one-sided dependence on Russian gas,” warns Vogel.
Martin Brudermüller defends the involvement in China, as he always has. There is no way around China for profitable growth, he asserts. And supervisory board Kurt Bock defends Brudermüller, the inspectors and thus himself. China was often discussed in the committees. “You pushed this issue forward with a warm heart, but also with a cool mind,” says Bock. “It wasn’t a gut decision, it was a very considered decision, as it suits your nature.”
At the end there is another verbal scolding, so Brudermüller remains Brudermüller. Brudermüller complains that German society is still not aware of the significance of geopolitical and economic developments. Security, prosperity and climate neutrality do not come for free. A change in mentality is needed away from the “fully comprehensive mentality” towards more pragmatism and more reason. “But things are going in the wrong direction. Particular interests take precedence over the common good.”